Mississippi’s gross domestic product increased by 1.9 percent in the third quarter of 2019, preceded by a 2.3 percent growth in the second quarter.
According to data from the Bureau of Economic Analysis, 49 states saw positive growth in the third quarter. Mississippi’s numbers were slightly below the Southeast and national averages, which were both 2.1 percent. This placed Mississippi 31st nationally.
Mississippi’s growth was most prominent in the following industries: Agriculture, forestry, fishing, and hunting, nondurable goods manufacturing, wholesale trade, and retail trade. The state outpaced regional and national growth in a couple key sectors.
The average growth in Southeast for agriculture related work was 0.08 percent, but it grew by 0.40 percent in Mississippi. Mississippi also saw a 0.66 percent growth in retail, up from the Southeast average of 0.52 percent.
Nondurable goods manufacturing was the fastest growing sector in the quarter, at 10.1 percent. In Mississippi, it grew by 0.37 percent.
Among neighbors, Louisiana and Arkansas had the fourth and fifth highest growth rates nationally.
Percentage change in real GDP in the Southeast
During the first three quarters of 2019, Mississippi’s GDP grew by 1.0 percent, 2.3 percent, and now, 1.9 percent. Data on the fourth quarter will be released in April.
Unemployment numbers for 2019
While we have seen positive signs from the GDP, Mississippi was the only state in the country to post an over-the-year unemployment rate increase in 2019. For December, 2019, Mississippi’s unemployment rate stood at 5.7 percent, one percent higher than at the same point in 2018.
Alabama had the largest over-the-year decrease, as their unemployment rate dropped from 3.8 to 2.7 percent. Our neighbors added about 46,000 jobs in 2019, while Tennessee added 50,000.
Mississippi, meanwhile added just 6,000 jobs in 2019 after losing 1,400 jobs in December.
Mississippi is in a dangerous cycle, but it is one that can be corrected. There are policies the state can adopt that would put Mississippi ahead of the curve when it comes to national policy and positioning the state to be competitive nationwide.
For starters, Mississippi needs to move away from a desire to overregulate commerce and embolden government bureaucrats. Mississippi has more than 117,000 regulations that cut across every sector of the economy. A successful model to stem this growing tide would be a one-in, two-out policy where for every new regulation that is adopted, two have to be removed. If a regulatory policy is so important, let’s make the government prove it.
The Trump administration adopted a similar executive order in 2017, and the numbers show we are actually seeing decreases greater than two-to-one, and these are not insignificant regulatory reductions.
This could be particularly beneficial in healthcare and tech policy. No department regulates more than the Department of Health, but our goal should be a push toward free market healthcare reforms that encourage choice and competition. In tech policy, the state has the opportunity to be one of the first states to essentially open the door for innovation, rather than one where entrepreneurs need to seek permission from the state. If Mississippi wants to get in the technology world, and we are convinced this is essential, a permissionless innovation policy in healthcare would be a big step in the right direction.
We should also not require people to receive permission from the state to work when they do move here. Open the door to productive citizens by allowing for universal recognition of licensing, following the path paved by Arizona. If you have been licensed in one state, that license should be good in Mississippi. Again, we could be ahead of the curve.
At the same time, our occupational licensing regime should be reviewed. Today, 19 percent of Mississippians need a license to work. It was 5 percent in the 1950s. While there are some occupations where a license is obviously prudent, we’ve expanded into far too many occupations.
This serves to lower competition and increase costs for consumers, while not providing those consumers with a better product. Occupational licensing is an example of how Mississippi misses the opportunity to grow her economy by acting in defensive ways to protect the slices of our economic pie for the well-connected when the reality is we could create a much bigger economic pie if we encouraged more creative disruption, competition, and risk-taking.
Finally, Mississippi needs to shed its abundant reliance on government and the public sector. Whether for public assistance, grants, contracts, jobs, or specific tax breaks, the citizens and companies in Mississippi are too dependent on state government. And the state is too dependent on the federal government. We have the third highest level of economic dependence on federal grants-in-aid in the nation (43%) and the fourth highest level of our economy driven by the public sector in the country (55%). Politicians, state agency directors, and government bureaucrats cannot create the economic growth we need. They can, however, work together with our various representatives and create an environment that allows and encourages private economic activities. Ultimately, with such an environment, it will be the entrepreneurs, business owners, productive workers, creative disruptors, capitalists, managers, and consumers who deliver the economic growth we all seek.
Mississippi can share the success of our neighbors. It will just take work.